If you’re hoping to buy your first home but have a low income or a credit score below 610, First Home Finance from the South African government may be a lifeline. This home loan solution, previously known as FLISP, is specifically tailored for South Africans earning between R3 501 and R22 000 per month, including those struggling with less-than-perfect credit histories. Loans can be supported with a one-off subsidy between R30 001 and R130 000, which makes homeownership much more accessible by boosting deposit funds or directly reducing your home loan balance.

First Home Finance doesn’t require you to have a stellar credit record; the government subsidy reassures banks and contributes to more favourable home loan offers. You must be a South African citizen or permanent resident, over 18, with financial dependents or living with a partner, and not already owning a property.

How to Apply for First Home Finance

1. Check your eligibility: Ensure you meet the income, residency, and first-time buyer requirements.
2. Obtain your home loan approval in principle from your chosen lender.
3. Complete the First Home Finance application form online or via your service provider.
4. Submit all required documentation, including proof of income and identification.
5. Wait for confirmation and, if approved, your subsidy will be paid as directed.

Advantages of First Home Finance

One major advantage of First Home Finance is the potential to secure a home loan even with a lower credit score, thanks to the security of the subsidy.

The subsidy, ranging up to R130 000, can significantly decrease your required deposit or home loan capital, leading to reduced monthly payments and overall interest.

Downsides of the Offer

While First Home Finance is a great help, your application could take additional time due to extra paperwork and government processing.

Furthermore, the loan is only available to first-time buyers who have never owned a property and haven’t received a government housing subsidy before.

Verdict: Is First Home Finance Worth It?

First Home Finance is an excellent route to homeownership for South Africans with steady but modest incomes and less-than-perfect credit. The subsidy can make all the difference for first-time buyers.

While there are eligibility limits, applicants who meet the criteria will find this programme is undoubtedly worth considering for their first home purchase.